FACTS againest MYTHS V0L-VII-4-2001
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- FACTS againest MYTHS V0L-VII-4-2001
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VIKAS ADHYAYAN KENDRA
Vol VII #4/2001
INFORMATION BULLETIN
Prescription for TNC Takeover of Indian Agriculture:
The Myths Behind the Agreement on Agriculture (AoA) - I
he globalisation of food in today’s liberalised-WTO regime is an increasing economic reality with
mega agri-business TNC becoming the dominant players. The detrimental impact of such corporations
is the immense power they have accumulated and wield to change agricultural polices globally. This is
bound to have far-reaching implications for Indian agriculture with severe repercussions to rural
population, to food security, employment and poverty. With the imposition of the market-driven,
capital-intensive agricultural paradigm the plight of the farmer will be further depressed and pushed
deeper into the debt trap. With no hope of the situation changing for the better, he commits suicide.
With Indian agriculture already in a state of crisis and taking the lives of rural population in suicides,
the take-over of Indian agriculture by these mega corporations represents a major threat to the country’s
food-security and lifeline. Side-by-side the increasing deterioration in the WTO-induced terms of trade
and the removal of the quota restrictions on imports on April 1,2001 will spell the death-knell of a
large number of agricultural products. The present government’s obeisance and pledging to the US
Government’s demand on December 31,1999 led to the removal of all Quantitative Restrictions (QRs)
even before the date 2003 stipulated by the WTO. The Prime Minister reportedly1 ordered the removal
of QRs on 714 items by April 1,2000 arid the balance (715) on April 1, 2001. As part of this broad
strategy, every year more and more
commodities are free from QRs and brought
Free Movement of Food within India
onto the OGL (Open General License) list. Such
instead of Free Movement from US & EU
removals along with tariffication are bound to
hit the long-term sustainability of the
agricultureal sector thereby adversly impacting
food security.
'
.
The adverse impact of such a policy regime,
imposed by this multilateral trading machine,
the WTO, paves the entry of agribusiness TNCs
in a big way which will transform the very
structure of India agricultural economy. A two
pronged strategy has already been adopted to
achieve this goal. One is to enter into direct
contract with Indian farmers who are required
to produce specific crops using specified
agricultural inputs.
FACTS against MYTHS
Q FOR PRIVATE CIRCULATION ONLY
■f a*
.C*/
A
FOR THE PEOPLE
OF THE PEOPLE
BY THE PEOPLE
In the rural areas, for instance, various kinds of
contracting procedures have being introduced by
agribusiness TNCs, a method to pass on the risks of
production to the farmers, while retaining the right to
mop up the extra profits as and when they arise.
American TNCs, Pepsi and Cargill have signed
agreements with the governments of Punjab and Gujarat
to launch contract farming with farmers as well as
provide inputs like seeds and storage facilities to them.
The second strategy is to take over production directly.
The AoA allows the North to flood the South with highly
subsidised food imports. At the same time, the South is
also being pressured to end all State support to
agriculture in the name of reducing fiscal deficit. These
strategies will ruin especially small farmers and thereby
enabling the TNCs and their Indian collaborators to
take over their lands and set up huge farms to produce
and export ‘exotic’ crops. Contract farming is already
being practised by MNCs and their subsidiaries like
Cadbury (Cocoa), Pepsi Co. (potato) HLL (milk, tea,
chicory and tomato), ITC (oilseeds), Cargill (seeds),
etc.
A recent study on contract farming states: . .Contract
production tends to shift production in favour of exportoriented and cash crops at the cost of basic food crops
for the poor. This can lead to higher process of the
food commodities and products, especially for non
contract fanners and the labour households who do not
benefit from contracting in terms of higher incomes”2
Historically, in the international arena, these multi
lateral terms of trade was not applicable to the
agricultural sector; with no pressure whatsoever to lift
tariff walls and quotas, etc. Thus, during successive
trade talks at the GATT in Geneva, agriculture was not
subjected to the same push to reduce tariffs and quotas
as industry. The net result was the trade in agriculture
remained virtually outside the jurisdiction of this global
body. All this, however, changed when the last round
of GATT trade negotiations was launched in Punta del
Este, Uruguay in September 1986 when a broad
consensus among the rich North on the urgency to
reform agricultural policies and achieve trade
liberalisation in the sector was arrived at. For the first
time in the history of multi-lateral trade negotiations
agriculture was brought into the purview of GATT, with
the signing of the GATT Agreements in 1994. It became
the stepping stone for adding new areas and new issues
to its agenda and this adding of new issues to what is
called “built-in agenda” of the Uruguay Round of
Agreements will continue and even intensify in the
coming years. The original 'Agreement’, GATT (1947)
had allowed various exceptions to rules on non-tariff
measures and subsidies, accentuating these distortions.
Subsequent consultations, however, culminated in the
Agreement on Agriculture (AoA) which formed part
of the Final Act of the Uruguay Round of Multilateral
Trade Negotiations (1986-1993) and another form of
external libralisation. Signed in April 1994 at Marrakesh
in Morocco, it came into effect on January 1,1995 a
result that should not come as a surprise at all since
global agri-business operations have held enormous
clout over the negotiations. In fact, C. Yeutar, a former
employee of the TNC, Cargil and of the US Dept, led
the US delegation! Thus, these multi-lateral trde
negotiation mechanisms are clearly potent tools in
hands of the North, to continue their hegemony over
the economies of the South.
Under the terms of the AoA, the South committed
themselves to reduce their domestic support as well as
their export subsidies to their farmers over a 10-year
period. They are also obliged to increasingly open up
their markets to the agricultural goods and services of
other countries. Although these obligations applied to
all states, the North (particularly the US and the EU,
which determined the final shape of the Agreement)
ensured that the interests of their farmers were not
jeopardised. Thus, by an act of legal sophistry, the North
succeeded to retain intact most of their subsidies to their
farmers while committing the countries of the South to
reducing, and eventually, to eliminating subsidies to
their farmers. The AoA is thus a threat to people’s
right to food security. The threat operates in two wajfli
It limits government’s actions and interventions to
ensure stability of price for both farmers and consumers
by encouraging export dumping. Secondly, as world
Crop/product
Major Exporters
Major Importers
Coffee
Cocoa
Tea
Sugar
Banana
Natural Rubber
Brazil, Colombia, Guatemala, Mexico
Brazil, Dominacan Republic, Ecuador, Cameroon
Bangladesh, China, India, Sri Lanka, Indonesia
Brazil, EU, Australia, Cuba, Thailand
Ecuador, Costa Rica, Colombia, Philippines
Indonesia, Costa Rica, Colombia, Philippines
Indonesia, Thailand, Malaysia, Sri Lanka
USA, Canada, EU
USA, Canada, EU
EU, USA, CIS, Australia
EU, Russia, US A, Japan
USA, EU, Japan
USA, Japan, China
Germany, Korean Republic
Source: Commodity Market Review, 1998-99. FAO, Rome
FACTS against MYTHS
2
prices fall, domestic prices to fanners are forced to touch
new lows, forcing them often into bankruptcy thus
placing food security into jeopardy with the spectre of
famine hovering over them. (Cf. FAM #2/20001)
These trade machinations are a product of an economic
agenda that lays emphasis on the free play of markets
and goods. Not surprisingly, therefore, the free trade
vision expressed by AoA is of an integrated global
agricultural economy in which all countries produce
specialised agricultural commodities, and supply their
food needs by shopping in the global supermarket. Food
is grown, not by farmers for local consumers, but by
TNCs for global markets. The consequences however
of this global model are disasters for India’s food
security as subsistence farms are lost to export producers.
The model is also extremely problematic for
environmental and food safety reasons. For instance,
the globalisation of food production and trade
necessarily requires that agricultural commodities be
transported long distances, and be processed and
packaged to survive the journey. In addition to
sacrificing quality and variety.
The above makes it clear that a hidden agenda operates
behind the policies of these multilarteral institutions,
namely, to enforce an international division of labour
wherein advanced capitalist countrties will produce and
export manufactured products (which are typically high
value-added) and will import primary products from
the South. This will become clear by examining the
patterns of global agricultural trade. (See Table on pg.2)
The only exception to this rule is that foodgrain
production will be controlled by the North! In the case
of wheat and coarse grains, the control is direct and
obvious; all the major exports are from the rich North.
In understanding these dynamics and mechanics of
global trade there is need to take a close hard look at
the ways and means the North attempts, through the
.WTO, to appropriate the global economy by integrating
"he South’s agriculture into the global design of the
TNCs, comprising of G-7 (led by the US). The 4th
Ministerial meeting of the WTO scheduled for this
November at Doha, Qatar is thus relevant and ominous
particularly to the countries of the South. Citizen’s
groups from the South and the North are rightly
opposing the proposals being put forward by some
countries to launch another “comprehensive New
Round”. Vested interests in the North are attempting to
introduce new issues, namely investment rules,
competition policy rules and government procurement
into the WTO. The newly appointed Trade
Representative of the Bush Administration, Robert
Zoellick, tried various means including the stick and
carrot in winning over the Indian government to “their”
FACTS against MYTHS
understanding on trade issues and the need for another
“new” round of trade talks. This is how the North
especially the US is applying their economic and
military might as well as their political clout to make
the South toe their line on these trade issues. These
issues, however, are not trade issues and are
inappropriate for the WTO to handle and if located in
the WTO, would lead to disastrous consequences
socially, environmentally, economically and for human
rights, for people world wide. The Australian Bureau
of Agriculture and Resource Economics (ABARE)
which conducted a study of the impact of agriculture
trade liberalisation on the South suggested that the South
should exert as much pressure as possible at this Meeting
in Doha to reduce market distorting subsidies and insist
that their concerns should feature more prominently
than in the past in such trade talks. Indeed, the clearing
away the cobwebs of confusion built into the AoA under
the facade of “complex issues” and the associated myths
must be removed.
MYTH: AoA is a rule-based system aimedprimarily
to protectfood security, nature and culture and at the
same time helping smallfarmers and the Third World
to be more competitive.
FACT: The AoA is no doubt a rule-based system but
these have been formulated mainly to pursue the goal
of trade liberalisation of agriculture. The US in the
Uruguay Round of GATT actively pushed it.
This rule-based system is, moreover, the wrong set of
rules for protecting security, nature and culture. Instead
they are perfectly shaped for the objective of corporate
rule over our food and agriculture system.
The AoA rules (supposedly) apply to countries, even
through it is not countries or their farmers that engage
in global trade in agriculture but global TNCs like
Cargil. These TNCs gain from every rule that
marginalises farmers by removing support from
agriculture and also from every rule that de-regulates
global trade, liberalises exports and imports, and makes
restrictions of exports and import illegal. Market
openings through the AoA are therefore market openings
for the Cargils and Monsanto’s - not for the small
farmers and the South!
These rules, then, are nothing more than a device to
anaesthetise the public so that one senses the hijack of
food systems by corporate power. One of the various
means being applied is through an extremely
complicated and confusing system of the so-called box
system - the “Green Box”, the “Blue Box” and the
“Amber Box”. In this way the WTO makes it difficult
for citizens, policy makers, and government to figure
out what is really happening! However, when decoded
these “boxes” turn out to be cleaver ploys to safeguard
the interests, providing the North with a cover in
supplying domestic support to their own farmers.
Policies that are not deemed to have a major effect on
production and trade are classified as the “Green Box”.
Those that fall in between are called the “Blue Box”
where direct support, indirectly covers the fixed costs
of the farmer, leaving him only to bear the variable
costs. This makes even the most inefficient farmers
efficient.’ Policies that do have a substantial impact on
the patterns of flow of trade are called the “Amber Box”
policies and are subject to reduction. These include
budgetary outlays, foregone revenue, and payments at
national and sub-national levels. These subsidies are
labelled “production neutral” and are thus excluded from
the definition of state support, which enable the farmers
to enter the global market with lower prices. Countries
like India with fiscal problems cannot even hope to
implement similar provision even on a tiny scale.
Other illustrations1 of how corporate, industrialised
agriculture is given advantages through this so-called
box system are as follows:
The allowable ‘Green Box’ policies include
’producer retirement' programmes, “resource
(land) retirement programmes”, environmental
programmes, marketing information, and
infrastructure.
The subsidy for producer retirement must be
conditional on total and permanent retirement
of the recipients from marketable agriculture
production. Thus, farmers can get assistance
to leave farming, but not for staying active as
producers. The farmers also have no say in
what happens to the land they leave. The
subsidy for resource retirement must be
conditional on retiring land from marketable
agricultural production for at least three years,
and in the case of livestock, on its slaughter or
permanent disposal; For the most part-, these
“green box” policies will affect only farmers
in affluent countries, since these governments
are more able to pay for them.
$ “Blue Box” policies include measures such as
direct payments to farmers and land set aside.
These policies are allowed as long as the
supports are “de-coupled” from production
supports. This implies that direct payments can
be provided to support incomes of farmers, and
that the overall cost of production will not be
reflected in the price of commodities. In effect,
these exclusions imply that incomes of farmers
in the North will be directly paid by
C FACTS against MYTHS
governments, and will not be influenced by
trade. On the other hand, since incomes of
farmers in the South are derived from
production and trade, and not from direct
income support from governments, these
farmers will be totally vulnerable to changes
in global trade patterns and international prices
of agricultural commodities.
Further, it is well known that the farming sector in the
North enjoys large subsidies. Ironically, however, they
are not the main beneficiaries; the rules have not really
benefited farmers so much as they have contributed to
greater profits of the megaTNCs that today also control
the distribution and marketing of food products. An
adverse impact of such a developments is that American
farmers are effectively being incorporated into a
peculiar collectivisation of agriculture where these TNCs
operate all the way along the value chain. It is precisely
this model of growing corporatisation of agriculture
and ago-processed commodity production that is being
upheld as an example for countries such as India.
Further, the corporatisation of food production and and! J
trade necessarily requires that agricultural commodities
be transported long distance, and be processed and
packaged to survive the journey. In addition to
sacrificing quality and variety for durability, this system
of agricultural trade requires enormous inputs of energy.
In fact, when account is taken of all energy inputs, global
food production and trade consume more fossil fuel
than any other industrial sector. That is why international
agricultural trade policies are likely to substantially
increase greenhouse gas emissions and make climate
objectives much harder to achieve.
MYTH: The AoA is in India’s best interest and in no
way infringes the rights ofits citizens like endangering
food security, etc. On the contrary, it will usher in a
new era for agricultural trade the key to global food
security.
FACT: On the contrary! The consequence ofthis global
model, however, is a disaster for the food security of
both India and countries of the South. Subsistence farms
lose to export producers and are also, as stated above,
extremely problematic for environmental and food safety
reasons.
Further, according to an FAO study5 of 16 countries of
the South, these countries have been experiencing severe
drawbacks in implementing AoA. For instance, on
Domestic Support the AoA merely consolidated and
reinforced the earlier reform measures that were being
implemented by countries as part of the SAPs, regional
trading agreements, etc. There was also a general move
towards concentration of farms with the importance Of
Q
food security getting sidelined whereas exports were
provided ‘top priority*. The South also experienced
greater marginalisation of its farmers and unemployment
taken for granted in the name of promoting
competitiveness in certain agricultural crops. The key
reasons, however, for the crisis of agriculture in the
South that in spite of AoA the farm sector in the North
continues to be heavily subsidised whilst the South
experiences an acute resource crunch. Finally, most
countries of the North continue to display total
indifference in implementing the various provisions of
the AoA.
Finally, at the global level, the role of food trade is not
to ensure adequate nutrition but to meet effective
demand - demand backed by purchasing power. That
is why most food trade takes place between people who
are already adequately fed. Is it any wonder therefore
that AoA occupies a pivotal position in the US farm
export strategy for Asia. The US Department of
Agriculture (USDA) estimates suggest that
implementation of this Agreement will create market
opportunities totalling more than $3 billion! According
a report in the Economic Times (20-11-1998) the
USDA is also eyeing the Indian market: “The US also
exports 2,000-5,000 tonnes of dry green peas to India
every year. These may now increase after India decided
to do away with customs duty on all pulses. Previously,
all pulses were subject to a 10 per cent duty”.
Thus, far from ushering in a new dawn for agricultural
trade the AoA instead marks the latest phase in the rise
of global food system structured round powerful vested
interests based in the North to the detriment of the poor
in the South. Global trade has little or nothing to do
with meeting human needs!
MYTH: The orignal trade agreement, GATT also
applied to agricultural trade but it had a minor
loophole. For example, it allowed countries to use
^ome non-tariffmeasures such as import quotas, and
"o subsidise.
FACT: On the contrary! The original GATT (1947)
did not apply to agriculture! (See above).
The point of removal of non-tariff barriers is merely a
facade - a cover to open up wider opportunties for the
TNCs to size larger and larger share of the markets and
business of local firms of the South, converting them
into an immense FTZ (Free Tarade Zone) (Cf. FAM #
8/1999).
Thus, the GATT was the worst rip-off of the lot, affecting
a vast number of poor and small farmers around the
world. Poor countries are not permitted - and have no
resources - to support small farmers but must be open
to subsidised imports. The rich North - and particularly
Q FACTS against MYTHS
the EU - continue to subsidise farmers and exports
while restricting imports. Governments in the South
are duty-bound to maintain food security. Subsidised
food exports are quite another matter. ‘Free” trade
promotes food insecurity in hungry countries, which
often have nothing other than agricultural commodities
to export to rich countries.
MYTH: Integrating agriculture with global market
provides thefarming community worldwide and who
are members of the WTO the opportunity of a level
playingfield.
FACT: Ground reality is just the opposite! Claimants
of this myth conveniently forget that the development
stage, sectoral composition of income and workforce,
marketable surplus and competitive capability of
countries of the North and the South are not the same.
Even in the South there are enormous differences.
More specifically, as Quantitative Restrictions (QRs)
have been replaced by tariffs under the WTO regime,
Indian farmers are subjected to unfair competition from
heavily subsidised grain imports from advanced
countries. The average tariffs in the G-7 countries for
1995 stood at 214 per cent for wheat, 197 per cent for
barley and 154 per cent for maize, while the average
import tariffs in the South were 94 per cent for maize
and rice. As against this, India brought down its tariffs
from as high as 250 per cent to just 15 per cent and thus
created price crash to be suffered by the farmers..
Moreover, the agricultural sector of the North, mainly
G-7 and the EU engages only Ito 4 per cent.of their
workforces, while that of most of the South 60 to 80
percent. A farmer in the North enjoys a handsome
subsidy of $29,000 a year. According to the recent
estimates, the total support extended to the farm sector
by the G-7 rose from $308 bn. in 1986-88 to $347 bn.
in 1997-99. Similarly the US domestic support for its
farmers was $26 bn.in 1996, while in the EU it was
$85 bn. Unfortunately, the figure in India was a negative
of $23.7 in 1995-96. The terms of trade under
globalisation thus have shifted very significantly against
the interest of the countries of the South.
Even according to the World Development Report
(2000-2001) the sectoral share of agriculture of lowincome economies in their GDP was 27 per cent
compared to only 2 per cent of the high-income group
of countries in 1999. Unlike the countries of the North,
where agriculture-is a business, agriculture in the South
is largely a means of livelihood. In 1997, the respective
shares in the global agricultural export of Western
Europe, North America, Asia, Latin America, Central
and Eastern Europe, Africa and Middle East were
41,19,19.6,11.9,3.8,3.7 and 1.0 per cent/ Evidently,
5
60 per cent of global farm exports are captured by the
North.
MYTH: Government subsidies are production neutral
schemes in public stocking offood
The gap between low-income economies and highincome economies, in terms of per capita GDP, has
marginally increased during the 90 as from 1:61 to 1:63.
It is now common knowledge that there are more than
800 million people globally who are chronically
undernourished. Agricultural trade liberalisation has
not contributed positively to world food security.
FACT: This WTO “logic” on the whole question of
what constitutes a subsidy in the WTO is questionable.
A subsidy refers to a shift away from a market-oriented
system of subsidising over-production towards a
different system of subsidising over-production, which
will result in roughtly the same amount of production
being dumped on world markets. Thus, the claim that
these subsidies are production-neutral is a blatant untruth.
On analysis, it becomes clear that these subsidies will
have the effect of increasing production by around 20
or 25 percent more than what is got under direct free
market conditions.
It is highly unfair that the farmers in the North, who
are far more well off inspite of their own domestic
problems, will continue to get such high levels of support
from their governments. Evidently it hampers the
prospects of the farmers of the South.
This significantly distorts the level playing field of
competition and can create problems for the South in
case they need to introduce these measures in the interest
of development of their agricultural production.
MYTH: The AoA allows the South concessions to use
public staockholding food grains for food security
purposes provided that the difference between the
acquistion price and the international price is
accounted in the AMS.
FACT: However, the capacity of the government to
intervene in the market, in keeping with the needs of
the food security, has been significantly circumscribed.
If India were to acqurie food crops for stockholding
under PDS at global prices, the food subsidy bill would
mount beyond manageable limits. And considering the
magnitude of the exisiting need for the PDS, retargeting
the beaneficiaries would be politically difficult and
practically impossible.
While this may appear to be a concession, in actual
effect it is not so. The amount of this subsidy has to be
included in the calculation of the AMS and this is subject
to the overall committed ceiling. Hence, if a country
in the South wants to provide this subsidy, it has to
reduce some other subsidy; this it could anyway, without
this ‘concession’. Instead, there should be a clear
provision that this subsidy will not be included in the
calculation of the annual AMS.
Furthermore, the AMS criterion makes it difficult for the
government to intervene in the market, in keeping with
the needs of food security, as its capacity to do so has
been significantly circumscribed. If India were to acquire
food crops for stockholding under PDS at international
prices, the food subsidy bill would mount beyond
manageable limits. And considering the magnitude of the
existing need for the PDS, retargeting the beneficiaries
would be politically difficult and practically impossible.
Interference with the PDS scheme is already leading to
food insecurity.
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If public funds and subsidies are put into the hands of
big farmers who are producing cereals, it is not an
unreasonable assumption that some of it is going to end
up in production. And since around a third of that
production is for export, is this not actually dealing
with a ‘de facto’export sul *sidy? This raises the question,
shouod not these compe’ satory payments be treated as
production subsidies from the angle of the AoA oQ/
should not these be brought under the disciples of export
subsidies?
Such trade agreements reinforce and complements the
sort of libaralisation measures which South have been
forced to undergo where subsidies and government
intervention in markerts are considered counter
productive. Such misplaced priorities dictate that the
countries of the South do not have the right to pursue
their own food security objectivies.
MYTH: By adopting modern agricultural (high-tech)
practices productivity is considerably increased which
will result in India successfully tackling its current
crisis in agriculture.
FACT: Government policy makers including
bureaucarats are so conditioned to trite economic
assumptions, they are unable to acknowledge how* *
disastrous the globalisation of food is for rural agrarian
economies like India. As mentioned elsewhere in this
publication, it impels every region to specialise in
whichever commodity its farmers can produce most
cheaply, and to offer those products on global markets.
All foods consumed locally, meanwhile, must be brought
in from elsewhere.
The myth under question relates to the highly specialised
farms that the dominant agricultural paradigm favours.
Such modem farms are considered ‘efficient’ when they
are large, monocultural, and employ heavy machinery.
Attaining the scale needed and the equipment required
could drain the capital reserves of all but the biggest
farmers, saddling the rest with a debt burden few can
6
escape. Eventually, small farms are driven under, and
their lands are consolidated into those of the largest
and wealthiest farmers.
Another relevant point, given its nature and characterised
by small land holdings Indian agriculture is not in
position to adopt so-called modem agricultural methods.
With increasing population, land holdings have
fragmented rapidly. In 1976-77, the average size of
holdings was estimated at 2 hectares. By 1980-81, it
had declined to 1.8 hectares, and today, it stands at 0.2
hectares. By the turn of the century, the average per
capita land holding will be a mere 0.11 hectares. The
rapid expansion in the number of land holdings with
less than a hectare under plough has meant an additional
6,00,000 farmers opting out of land every five years or
so. And as if this is not enough, the number of rural
landless has multiplied over the past few decade, at an
estimated rate of 2 m. each year.
Another important factor is the issue of conventional
agricultural practises being inextricably linked to
irrigation and irrigation is stiFnprimarily tapped through
^^iarge hydel projects. The whole political economy of
the Green Revolution eclipses any debate on revaluing
the land-based resources for bettering the overall rural
environment. In India and other countries of the South
resource maximisation has been the credo for the last
25 years and also the ‘modus vivendi’ for avoiding food
shortages and famines. With overall agricultural growth
rate declining, the cost of subsidising fertilisers has
increased a treadmill small fanners especially cannot
get off even if they wanted to. A rice farmer from West
Bengal, for example, who occupies 3 ‘bighas’ of land
with 3 rotations annually would be reluctant to switch
over if the profit margins are not guaranteed. Similarly,
the various dry-land farmers who are desperate to
upgrade their soil productivity and who want access to
affordable fertilisers, pesticides and irrigation.
Furthermore, the constant need to purchase the latest
^®technology, the most potent chemical inputs, and the
highest-yielding seeds places farmers firmly (again) on
the ‘technological treadmill’. Advances in technology
may raise single-crop yields, but they also often lower
the farmer’s net income: capital expenses, debt service
and production costs eat up a higher proportion of the
farmer’s income, while overall increases in output
merely cause the price of global commodities to drop.
In the US, for example, factory farming techniques including carefully controlled heating and lighting
specially formulated feed and heavy doses of antibiotics
- enable the average poultry producer to raise 240,000
birds each year. But after expenses this prodigious (and
inhumane) production earns the farmer only $ 12,000,
or 5c per bird. Such technological ‘advances’ typically
Q FACTS against MYTHS
do nothing to help farmers, but provides a boom to
Agri-buusiness TNCs.
MYTH: For countries like India and the South it is
cheaper to import cheapfood crops rather than to invest
resources in the costly process ofproducing food in
the country.
FACT: As far as the staple food is concerned this is an
inappropriate claim. In theory it may be already; in
practice it can be disastrous for the South. First and
foremost, the South suffers from a chronic shortage of
foreign exchange. Dependence on imports for their
staple food in such a situation may cause difficulties
and uncertainties in the availability of food in these
countries. Coupled with the privatisation of agricultural
trade, dependence on imports of food may also cause
serious uncertainties and frequent high increases in the
prices of the staple food products. A delay in the import
of food at the time of a shortage of foreign exchange
will cause tremendous misery to the people, resulting,
at times, in social unrest.
Second, even if adequate foreign exchange is available,
imports may not be readily available at times of need
for various reasons. A country can ill afford an
uncertainty in the availability of food.
Third, dependence on imports for the staple food may
reduce the foreign policy options of a country, at least
on critical occasions, thus constraining its sovereignty
in external relations.
Assured provision of staple food is almost as important
for a nation food as somewhat different from the normal
commercial transactions in international trade.
MYTH: Modern agriculture has no impact on climate
or the environment.
FACT: Agriculture’s direct contribution to greenhouse
gasses is less than that of industry. But it is nonetheless
significant and it is mainly due to the intensification in
agriculture that the industrial agricultural model
precipitates. It has made the productivity of farmland
ever more dependent upon massive infusions of energy
to produce and operate farm machinery, and to produce
chemical-based fertilisers and pesticides. But the largest
energy demands with industrial agriculture has to do
with packaging, transporting and marketing agricultural
products. In the US, the average length of journey of
processed food is some 3,000 km. Worldwide, industrial
agriculture is responsible for approx, one quarter of
anthropogenic carbon dioxide emissions, nearly 60 per
cent of methane emissions and up to 80 per cent of
nitrous oxide emissions. At least 40-m. tonnes of
methane a year come from biomass burning, including
the destruction of tropical forests.12
7^)
Further, the data available to those working to address
climate change, obscures the underlying and structural
relationships that are fueling the increasing energy
demands of so many countries. Thus, energy/CO2
estimates are provided for commercial transportation
and industrial processing. But no effort is made to
dissaggregate that data to identify the portion attributable
to moving, packaging and processing agricultual
commodities. When a more comprehensive estimate is
attempted a much different picture emerges of the
underlying causes of global warming. For example the
total energy demands of UK food realted industries
(direct fuel to agriculture, fertiliser and agrichemical,
machinery, transport, import of animal food, food
processing, food distribution, import of human food,
home cooking, and waste disposal) as a percentage of
total UK energy use was 28%. (WTO...)
References
The main impact of industrial agriculture on climate,
however, is in the degradation caused directly or
indirectly to land. Under the IMF/WB domination,
governments have sought to increase the amount of land
underproduction, primarily in order to earn the foreign
exchange that will (supposedly) enable them to service
their debts and achieve export-led growth. Rather than
address the skewed patterns of land distribution that
have resulted from such development strategies - with
the best land used by richer farmers to grow export
crops - many governments have encouraged the landless
to open up marginal lands, particularly forests.
Meanwhile, those who previously farmed the land have
been forced to clear the upland forests, which are
curently being lost at the rate of over 20,000 hectares a
year.11
C8 X 03 X 03 X
t v. t -v
I y
Arvind. World Bank Dictated Government
Policies Destroys Agrarian Economy I, People’s
March, March, Delhi,.2001.
2. Basu, D. The New (?) Division of Laobour: WTO
and Indian Agriculture, Kalam, November 2000Fcbruaray 2001, New Delhi.
3. Abdul, Dr. N. Challenges of Globalisation &
Growing Threat to Food Security, Monthly Public
Opinion Survey, July, Newl Delhi, 2001.
4. Shiva, Dr. V. WTO and Free Trade: A War Against
the Fanners of India, CPI Publication, New Delhi
2000.
5. Khor, M. Globalisation of the South, Other India
Press, Penang, 2001.
6. Ghuman, R.S. WTO and Indian Agriculture: Crisis
and Challenges, Man & Development, June 2001.
7. Watkins, K. GATT’s Hidden Agenda: The GATT
Agreement on Agriculture, CIIR, London, 1994.
8. Sharma, D. Selling Out: The Cost of Free Trade
for Food Security in India, The Ecological
Foundation, Delhi, 2000. .
9. Carr-Harris, J. & Dudani, Dr. A.T. Agriculture antr
People, South-South Solidarity, New Delhi, 1992
10. Gorelick, S. Facing the Farm Crisis, The
Ecologist Asia, #4, 2000.
11. Das, B.L. The ‘Big Bang’ in Agriculture, Third
World Resurgence, #100/101, Malaysia, 1999.
12. Bunyard, P. Industrial Agriculture - Driving
Climate Change, Ecologist Asia, #3, Mumbai,
1997.
13. Lang, T. (etal) WTO and the Globalisation ofFood
Insecurity Research Foundation for Science,
Technology and Ecology, New Delhi, 1999.
1.
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Facts Against Myths is a monthly bulletin offactual
information on a number ofdevelopment myths and
fallacies, etc, including information against alien
development models, paradigms and false concepts
on caste, creed and gender. .
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